Patients May Face Big Bill Markup in ER, Study Finds

Written by Heather Cruikshank on June 14, 2017

Is your hospital charging fair prices for services?

According to a recent study published in JAMA Internal Medicine, the cost of emergency medical care varies widely from one hospital to another in the United States — and many charge exorbitant markups.

The research team that published the study analyzed billing records for 12,337 emergency medicine doctors from 2,707 hospitals across all 50 states in 2013.

Additionally, they found that emergency departments charged an average markup of 340 percent on Medicare allowable amounts.

The Medicare allowable amount is the sum of what Medicare reimburses for a service, the deductible and coinsurance paid by beneficiaries, and any amount that a third party is responsible for covering.

“Hospital payments will vary because they reflect each individual hospital and the unique care needs of the patient population it serves,” the AHA noted. “For example, one community may have sicker patients with more chronic illness while another may care for more uninsured patients.”

While Makary acknowledged that some variations in pricing may be justified, he also believes that predatory pricing practices are a problem.

“When you go to a hospital bleeding, holding the wound as you walk into the emergency room, you’re often asked to sign a form that says you legally agree to pay for a bill that you not only haven’t seen but can’t get an estimate on if you ask,” Makary said.

“In my opinion, these represent predatory pricing practices. They’re unfair contracts pushed on people at a time when they’re most vulnerable, with markups that can be at times egregious,” he added.

When patients don’t know what they will be charged ahead of time, it’s difficult or impossible for them to shop around. This is especially true for patients in the middle of a medical emergency.

More protections needed

Those who lack insurance or access out-of-network care are particularly vulnerable.

“When you go out of network, you can sometimes be responsible for the entire bill,” Makary told Healthline. Additionally, he said if a patient doesn’t have insurance or their insurance only pays a small part of the bill, your bill could be sent to collections.

He argued that fairer and more transparent pricing practices are needed.

“Well first of all, we need to ask hospitals to do a better job providing estimates when estimates are requested,” he said. “A hospital and a doctor cannot predict a complicated course of care. But they can answer the question, ‘if I end up having this straightforward procedure or service done, how much would it cost?’”

“And we probably need a kinder system that simply asks, is it worthwhile to get something done?” he added. “And if so, can we help you get the procedure done?”

The AHA stresses that some hospitals are working to address these issues.

“Hospitals recognize that the billing system is complex and are both working to make bills more patient-friendly, as well as demonstrating a significant commitment to making care more affordable,” AHA officials told Healthline in a statement. “We are working with a broad spectrum of industry stakeholders to provide guidance and tools for more meaningful and transparent price information and pledge to work with patients, engage them to answer questions about bills, provide financial counselling, and develop a billing process that is clear, concise, and correct.”

Some states including New York and Florida have also passed laws to help safeguard patients from inflated out-of-network hospital bills.

To protect patients across the country, Makary believes a national approach is needed.